US authorities have charged 55-year-old John DeMarr for his alleged participation in a cryptocurrency and securities fraud scheme. DeMarr allegedly conspired to defraud unsuspecting investors by promising large returns in the cryptocurrency market. He fraudulently procured over $11.4 million and diverted the money for personal use such as purchasing real estate, vehicles, jewellery etc.
During 2017-18, DeMarr and co-conspirators lured the victims to invest in their companies ‘Start Options’ and ‘B2G’ based on fraudulent and misleading representations. Start Options claimed to be an online investment platform providing cryptocurrency services. B2G claimed to be an ‘ecosystem’ allowing trading of B2G tokens and digital and fiat currencies. DeMarr and co-conspirators assured the investors that their funds would be invested in the two cryptocurrency platforms that would give them huge returns. However, the investors’ money was instead diverted to accounts controlled by DeMarr and others.
DeMarr and co-conspirators even paid celebrity promoters to falsely claim that B2G could give investors an “8000%” annual return. Additionally, they published false press releases, fabricated account statements and denied the investors the ability to withdraw their money. DeMarr even feigned his own disappearance to avoid angry investors when he was still living in California.
Source: US Department of Justice